At its core, estate planning is not something that you necessarily do for yourself. Instead, estate planning is something that you do for the people you love. Often the primary motivating factor for clients to engage in their estate planning is the unpleasant experience of administering a decedent’s estate that was not addressed properly. In addition to having to grieve your loss, a poorly execute estate plan – or no estate plan at all – can leave your loved ones mired in years of unnecessary confusion, delay, expense, and frustration. Conversely, a compressive, up-to-date, and detailed estate plan will serve as one of the best gifts you can make to those you care about.
Recently, the loss of a dear family friend motivated me to focus upon my own family’s estate planning. Below are the steps that I took.
1. Review and Update
As an estate planning attorney, of course I drafted my own estate plan as well as updated my father’s estate plan. But it had been several years since I had reviewed any of the documents. While there were elements of both estate plans that I had in mind to change, I kept putting off addressing those issues. As clients constantly relay to me, my good intentions were overshadowed by family, work, and social obligations. Motivated by not embodying the old expression of the “shoemaker’s kids not having any shoes,” I finally buckled down and cleared a weekend where I finally took charge to update my family’s estate planning.
If you are not an estate planning attorney, you should make an appointment with your attorney to review your existing estate planning documents. Ask your attorney to explain your plan and to give you an overview the practical steps that your fiduciaries will have to take. If you can, request a meeting with your attorney and your children so that everybody has an understanding of how the plan will function when needed.
Keep in mind that certain assets such as retirement plans, life insurance, and certain types of annuities will not be titled to your trust while you are living but should have up-to-date beneficiary designations. Contact each financial institution to make sure that your assets are either titled to your trust or, if appropriate, have the correct beneficiary designations.
If having an up-to-date plan is the first step, the second step is making sure that your loved ones can find your plan and have all the information they need to carry out that plan with ease.
After updating my estate planning and my father’s estate planning, I made sure to keep copies in accessible places. First, I created folders on my computer that featured final versions of all documents. I also created documents that provide an overview of the assets and how they were titled. With regard to non-trust assets such as retirement plans, life insurance, and annuities, I kept a separate folder of the confirmed beneficiary designations. I made a list of professional advisors such as my CPA, my financial planner, and my insurance agents. I also provided a detailed list featuring important elements of how I run my business with certain instructions. I executed a document allowing a “practice administrator” to help run my law firm in the event of my disability or death.
I realized that while I know (for the most part) what various keys at home and at the office are for, it might not be so obvious for loved ones. After all, many keys look alike and some are in fact duplicates. I developed a system where I coordinated keys with specific keyrings and provided instructions to easily identify each key.
I put copies of these important documents on duplicate flash drives, leaving one flash drive with the binder, giving one to each of my successor trustees, and leaving one in my safe deposit box.
3. Calendar Regular Updates
It took me several hours to update my estate planning and to create records of important information. If I wait too long before reviewing it, it will quickly become obsolete. I made an early New Year’s resolution to review and update my estate planning information every Christmas break and to give my successor trustees copies of the updated information each year. While my son might be excited about what Santa will bring him each year, the most important gift I can make to my family is the peace of mind knowing that a detailed plan is in place in the event of an unexpected incapacity or death.
KRASA LAW, Inc. is located at 704-D Forest Avenue, Pacific Grove, California and Kyle may be reached at 831-920-0205.
Disclaimer: This article is for general information only. Reading this article does not establish an attorney-client relationship. Before acting upon any of the information provided in this article, you should consult a competent attorney who is licensed to practice law in your community.